Is A Thanksgiving Week Rally Coming For SPX? Nov 25 Plan
After the biggest green week of the year on election week, one week ago today ES put in its largest selloff in about 3 months, retracing about 200 points from the election rally highs, and putting in the first real pullback after the monster 300 point rally we saw election week. This week, it was bought.
As readers recall, one week ago at Friday’s close I was looking for a relief rally to start this week after we relentlessly sold late last week, with the 5886 level being the base/magnet from which any large bounces would occur this week. Over the course of this week, this initial short squeeze evolved into a stable base at the 5886 level, which held over and over this week. On Wednesday at 3pm, I wrote: “As long as that level[5886] continues to defend though we are still in a relief bounce leg and it has a few obvious magnets. Since we broke down a base at 5943 to start today’s sell, the backtest of this would be the first magnet. After a reaction there, we can work up higher to 5972, then 5980-88 which is resistance of the bull flag structure shown in the above big picture chart that we have built since the election week highs”.
This played out extremely well and by yesterdays close, we had tagged 5980-88 flag resistance exact to set the high of day yesterday. This was a huge resistance, and we spent today chewing through it. I wrote yesterday “We just had a monster move higher, and are closing the day right at a major resistance structure”
Next week is Thanksgiving week and as most know, its seasonally bullish green 70% of years. Can we repeat this year and will the flag break higher? In today’s newsletter I’ll talk this, I’ll do a deep dive into the setup that set the major low Wednesday morning at ~5886 (it was my secondary setup: The Back-test), then yesterdays higher low (it was my core setup: The Failed Breakdown). Finally, I’ll discuss the actionable trade plan for Monday.